One thing that's annoying in a lot of games is that you're seeing the hero's back all the time. Being able to have a good camera angle that can capture the hero's face as well as the obstacles ahead would allow games to create heros with more personality without dumping on too many cutscenes...

Guaranteed there will be loads of masculine, testosterone built characters. Would be interesting to see a character that looked stereotypically like a geek but could deliver some serious punches too. So instead of gamers drifting into escapism through their muscle bound character that looks nothing like them, they'd play as someone who'd much more resemble them. I think this would establish a greater emotional link between the player and the character.

I think an important characteristic of this challenge, as Mariol eluded to, is to look into non-stereotypical heroes. I'd actually even argue though that a geek style character is a bit too obvious as well.

Exploring gender/age/height, minorities, extreme personalities, and other features for this hero is probably a good idea.

However, making the hero so wild that it's hard to relate to them may be detrimental. So, striking a balance between interesting attributes and familiarity may be the key.